The number of mortgages granted during the month of November in Spain dropped by 31,6% annually, down to 19.115 units. This figure is similar to the previous month´s and means remaining at a historic minimum level, according to the National Institute for Statistics (NIS). This figure refers to dates in which the sale of properties increased, so this confirms the idea that more and more properties are being paid for in cash.
There was a time when the number of monthly mortgages exceeded the number of property sales. This was due to the fact that the mortgage activity was even higher than the purchase one, as there were many mortgage operations which were not linked to a purchase (refinancing, for example).
Nevertheless, for the last few months, the figures supplied by the NIS show a change in trend. According to the NIS figures, the number of sales was 25% higher than the number of mortgages. In 2007 the situation was in reverse, as the number of mortgages was 50% higher than the number of sales.
The fall in property prices, linked to the increase in mortgage differentials, allows the purchase of properties in cash. This is happening mainly within the cheap properties, where buyers can face a purchase without a mortgage, whose average interest rate increased up to 4,39% in November. This has also allowed that the average amount per mortgage is declining at a slower pace than the price of properties. The average mortgage decreased by 4% annually, while property prices are decreasing more than 10%. (…)